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The Honolulu Advertiser
Posted on: Wednesday, May 23, 2007

China issues a warning on trade

By Martin Crutsinger
Associated Press

WASHINGTON — The Bush administration pushed for concrete results in high-level trade talks with China that began yesterday, but the head of the Chinese delegation bluntly warned against confrontation.

Treasury Secretary Henry Paulson said it was important that the two days of talks produce results to build trust between the two countries. He said Americans were by nature impatient people, and he said the two sides should work to build a "roadmap to the future."

The administration is anxious for success stories to show an increasingly restive Congress, where lawmakers blame America's soaring trade deficits and the loss of one in six manufacturing jobs since 2000 in part on China's trade practices in such areas as currency manipulation and copyright piracy.

The U.S. delegation also raised the issue of food safety highlighted by such incidents as the deaths of pets who had eaten pet food made with tainted wheat gluten imported from China.

U.S. Trade Representative Susan Schwab, who briefed reporters on the discussions, said food safety was raised over breakfast by Agriculture Secretary Mike Johanns and Health and Human Services Secretary Michael Leavitt.

"They know this is an issue that concerns us and concerns the American people," said Commerce Secretary Carlos Gutierrez.

Labor Secretary Elaine Chao, briefing reporters at the end of the first day of talks, said that Johanns had made a forceful presentation to the Chinese about the concerns Americans have on food safety. In response, she said, Chinese officials sought to assure the Americans that they would fully investigate any problems uncovered.

In opening remarks delivered in an ornate government auditorium decked out in flags from both nations, Chinese Vice Premier Wu Yi cautioned the United States against pursuing a blame game.

"We should not easily blame the other side for our own domestic problems," Wu said, speaking through an interpreter. "Confrontation does no good at all to problem-solving."

Wu, who gained a reputation for tough speaking when she was China's top trade negotiator, said that both sides should "firmly oppose trade protectionism." She said that any effort to "politicize" the economic relationship between the two nations would be "absolutely unacceptable."

Wu and her delegation were to meet behind closed doors during their visit with key leaders of Congress, including House Speaker Nancy Pelosi, who has been a vocal critic of China's human rights policies. Lawmakers are pushing a variety of bills that would impose economic sanctions on China in the wake of a trade deficit with China that last year hit $232.5 billion, accounting for one-third of America's total record deficit of $765.3 billion.

Paulson created the Strategic Economic Dialogue last fall as a way to get the country's top policymakers together twice a year to achieve results that will ease trade tensions. The first meeting was held in Beijing last December.

Breakthroughs at this meeting were expected in the area of cutting tariffs on sales of American energy technology products and services in China and increasing U.S. airline passenger and cargo flights to China.

However, success in another area — getting China to boost the stake that American firms can own in Chinese financial service companies — seemed less certain. The present cap on foreign ownership of Chinese banks is 25 percent.